Question

Trevor has an investment worth $6,774.50. He made his only deposit in it 22 years ago. Given that the investment yields 2.7% simple interest annually, how big was the initial deposit?

Answer 1

Its D i just took the test

Answer 2

My initial answer was $2750.45, and I will show you my calculations.

Calc : 6774.5 ÷ 100 = 67.745
67.745 × 2.7 = 182.9115
182.9115 × 22 = 4024.053
6774.5 - 4024.053 = 2750.45

= $2750.45

At first I thought this was correct, but after studying my answer I realise that the amount of interest would rise as the amount of money went up, therefore my calculations are very wrong. If I work out the answer, I will get back to you, but the calculation is more complicated than I first predicted